De Econometrist neemt een statistische kijk op de wereld.
‘I will build a wall – and nobody builds walls better than me, believe me. I will build a great wall and I’ll make Mexico pay for it!’ Probably one of the most controversial things a presidential candidate has ever promised. Yet it was one of the statements that got Trump exactly where he wanted to be. What most of the world thought would never happen, actually did, when Trump beat Hillary Clinton on the 9th of August, 2017. After his inauguration on January 20th, Donald Trump being the president of the United States of America was a fact. From that point onward, late night talk shows and comedians entertained us with more than enough content related to the new president and every unconventional step Trump took was highly talked about on the news. While Donald Trump repeatedly caught everyone’s attention, quite a few things changed on the background, but went by unnoticed while the man in charge took up the spotlight.
All throughout his campaign, most of Trump’s promises and pledges made headlines. But what Let’s take a look at his most well-known promises and the progress made on them after his first year in the office.
One of Trump’s first deeds as president was signing an executive order to start rolling back Obamacare. The idea of Obamacare was that every American had to get health insurance, or else they would be fined. Thus far, the Republican new health plan didn’t pass the Senate. However, Trump’s cabinet has been able to dismantle this fine for not getting health insurance. As most healthy people will now probably not get insurance, this is expected to have a spiralling effect on the health premium. Let’s just say that Trump hasn’t fulfilled this promise yet, but that he seems to be well on his way.
In December of 2017, the new tax plan finally passed the Senate, with the biggest change being the American corporation tax going from 35 percent to 21 percent (reluctantly, because Trump initially wanted to lower it to 15 percent). The opposition was rather angry about the fact that the details of the plan, which came to a total of over a 100 pages, only became available few hours before the decision would be made, not giving enough time for thorough research. While most economists came to the conclusion that the plans would be mostly beneficial to the rich and the big corporations, the Senate agreed to the following effects of the tax cuts:
The change in tax rate is expected to give the American economy another boost, up to growth rates of about 3 percent to 4 percent per year.
Right after the start of his term, fences were already put up along the border, which alone cost the US government $7 billion. At the end of the first year, these so-called ‘test walls’ – that aren’t at all like the amazing, impenetrable wall that was promised – were still the only thing between the US and Mexico. This made the real deal seem far off charts. But Trump has actually just set in motion his plan to build this very wall. However, the wall is not exactly going to be paid for by the Mexicans. If we were to believe Trump, it will cost the US government around $12 billion. Other studies are expecting it to cost quite a bit more, around $25 billion. The initial funding will thus come from US taxpayers, which sounds like quite the opposite of the rest of Trump’s promises. In order to make Mexico fund the wall indirectly, the following solutions have been proposed:
Since the plan has only just been set in motion, and we are talking about a wall over 1,000 miles long that has to be built upon a rough and unpredictable landscape, it remains questionable whether the wall will actually be completed before future governments will put a halt to the construction process.
The year in numbers:
The economy was already picking up before Trump was announced president, and continued to bloom under his leadership. The tax bill that was mentioned before is expected to give it another boost, with expected yearly growth rates of 3 percent to 4 percent. Alongside that, after Trump’s first year, the unemployment rate has dropped from 4.8 percent in January to 4.1 percent in December 2017. The wage growth however, while still growing, is growing less than before. Alongside that, student loan debt grew by $47 billion, now making up 10 percent of consumers debt as opposed to 4 percent a decade ago.
Although the new tax bill is supposed to cut taxes for everyone, it seems that especially big earners will benefit from it. In the chart below can be seen that people who fall in the first few quantiles don’t even notice that much of a difference. It basically comes down to the lowest quantiles not noticing that much of a difference the coming few years, and actually be worse off in the long run, while the top quantile (so the people who already earn the most money), experience a very expanded income in the first few years of the tax cuts and eventually also being better off in the long run.
Trump is still a businessman, and therefore the notable performance of the stock market during this year is no big surprise. The S&P 500 is up by more than 23 percent since Inauguration Day in January 2017. Trump often claims that his leadership alone is fully responsible for this fact, but since the world’s economy as a whole is picking up again, this is probably not the case.
While the US economy has undoubtedly picked up with Trump in the office, this is quite the opposite for the effects on the environment. President Trump pulled the U.S. out of the Paris climate agreement in June, which opened up opportunities for more drilling for fossil fuels and loosened the regulations on emission for companies. This emission of the whole country has also risen by about 15 million metric tons. Plans like the construction of Trump’s massive wall that will run right through a blooming landscape and the start of oil drilling in the nature reserve in Alaska will only put more of a strain on the environment. This however was to be expected, as Trump declared more than once that there is no such things as ‘global warming’.
Criticism on the US president
Putting all these facts aside, to my opinion it would be fair to say that the biggest thing that has changed overall was growth of criticism on Trump and an increase international tension. As is commonly known, Donald Trump’s twitter account is extremely active and is causing more than enough trouble on its own. Topics about Trump’s new statements are a goldmine for journalists and all criticism on the president seems to have opened a whole new work field for comedians and talk show hosts.
His reactions and statements have often been the reason for protests, even on a worldwide scale. With first Russia, and now North Korea, it seems like Trump has yet to learn the proper cross-cultural manners when it comes to establishing international relationships. His conservative stance when it comes to topics like immigrants and women’s rights were, and probably still are, a reason for protest movements arising within the country. The recent shooting in a school in Florida, which sadly is one of many, placed Trump in another bad light. Newspapers published the NRA’s (National Rifle Association) investments in Trump’s presidential campaign. After yet another shooting, American citizens are calling for tougher laws on gun control. Sadly, this probably won’t be realized in the near future, thanks to the lobbying of the NRA. Trump even insisted on arming the teachers in order to protect the children (more about that here).
It can definitely be said that Trump has been one of the most active presidents so far, being extremely good at drawing all media’s attention while his government is unnoticeably changing quite a few things. After this first year, Trump has accomplished quite a lot. Whether these accomplishments are ‘good’ or ‘bad’, depends on who you ask. The fact remains that Trump is a Republican president. The Republican party tends to hold onto conservative and liberal stances on social and economic issues. As for the conservative stance, with Trump’s behaviour towards Muslims, Mexicans, women, gays and most other minorities, it can be stated that Trump is quite a conservative president. Most things that have been altered in the law, have supported freedom of trade: you can choose for yourself whether you want insurance, drilling companies and refineries have less laws protecting nature to deal with and the gun trade will continue to be as profitable as ever. That, together with the big cut on taxes, all describes a very liberal economy. So, with a rough idea of what the Republican party stands for, one could state that Trump has indeed made America great again. But whether the majority of US citizens and the rest of the world agrees with that, is something I highly doubt.
Some more details:
More about funding the great wall
This article is written by Sabina Kamerling.